7 Ways To Avoid Estate Litigation

It's a sad fact of life that litigation often arises between family members over inheritances. Even families on the best of terms can be torn apart by perceived slights or disagreements over a parent's last wishes. To avoid this kind of infighting it's best to develop a strong estate plan, or at the very least a will that spells out your final wishes.

Here are seven ways to help avoid lawsuits over your estate after you pass.

1. Divide assets equally. Nothing is more likely to trigger estate litigation than treating siblings differently. The best rule of thumb is to divide everything equally among your children. If you have two children each gets half. If you have five, they all get one-fifth. Don't favor the child who has a bigger family over the others and treat stepchildren the same as the others. If you are disinheriting a child, make sure that is spelled out in the legal documents.

2. Designate recipients of cherished possessions. If you want specific items to go certain heirs, spell it out in your will. This eliminates any question of whom Mom wanted her china to go to. You can even give the items to your heirs long before you pass. Just make sure you're of sound mind when you do so or you run the risk of litigation when the slighted child argues you weren't aware of what you were doing. It can be as simple as making a list of your possessions and designating who gets what.

3. Keep records of loans. Loaning a child money and not specifying when, how or whether or not it is to be repaid is a recipe for disaster at probate. Always write down the terms of the loan. If the amount is to be deducted from the heir's share of the inheritance it can be considered an "advancement." If the loan is to be forgiven upon your death, say so.

4. Use contracts and trusts to transfer assets. Contracts are particularly useful in situations where there is a family business to hand over. If you have a certain heir you want to leave the business to, draw up a contract while you still can and sell the business to that person. Assets that are transferred by contract when you're still alive are much less likely to be targets for litigation. A trust is a good choice if you want to transfer real property to a child or heir. A trust allows you to live out your life on the property with ownership transferring to your heir after a set period of time.

5. Prove you're of sound mind. One of the biggest arguments in estate litigation is that Mom or Dad wasn't of "sound mind" when he or she signed the document. Put an end to this argument before it starts by having your doctor and a psychiatrist evaluate you and sign an affidavit that you are mentally sound as of the date you sign the will.

6. Add a "no-contest" clause to prevent litigation. No contest clauses are great protection against estate litigation. These clauses state that any beneficiary who contests the will forfeits his or her interests in it. As long as the beneficiary is receiving something he or she really wants via the will, it is a very effective tool to keep them in line.

7. Create your will now. If you wait until you're extremely ill to specify your wishes you run the risk of litigation arising upon your death. Not only will arguments arise that you weren't of sound mind or didn't understand what you were signing, it's entirely possible that these arguments could end up being true. You may, indeed, be so unwell that you are easily manipulated into making decisions you normally wouldn't make.

If you are truly concerned that your wishes will be challenged, then you owe it to your heirs to work with an elder law attorney who is experienced with wills and estate planning who can help you design a plan that fulfills your last wishes.